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What are Red Flags for DEA Investigators During a Pharmacy Audit?

When Facing DEA Audits, Pharmacy Owners and Pharmacists in Charge (PICs) Need to Know What Issues are Most Likely to Lead to Trouble.

Attorney Lynette S. Byrd
Pharmacy Compliance Team Lead
Former Federal Prosecutor

When DEA Diversion Investigators show up at your door to initiate an audit, you need to be prepared. These audits – which are unannounced – examine all aspects of pharmacies’ compliance efforts, and even unintentional and seemingly minor issues can create big problems for pharmacy owners and physicians in charge (PICs).

Ideally, your pharmacy will have an up-to-date and fully-implemented pharmacy ompliance, and the audit will end without further inquiry. But, if this is not the case, or if you do not know if it is the case, then you will need to be aware of the red flags that are particularly likely to raise concerns for the DEA.

15 Red Flags for Non-Compliance in DEA Pharmacy Audits

What are these red flags? Within the context of a DEA pharmacy audit, some of the issues that are most likely to trigger enhanced scrutiny include the following:

1. Lack of Accurate Registration Information on File

All pharmacies are required to maintain up-to-date DEA registration records on file, and they must post their DEA Certificate in an approved location. When DEA Diversion Investigators show up to audit your pharmacy, one of the first things they are going to check is whether you are complying with the DEA’s registration requirements.

2. Lack of Written Policies on Opioid Dispensing

Pharmacies’ opioid prescription practices are heavily scrutinized during DEA audits. In order to demonstrate compliance, not only must you have appropriate safeguards in place to prevent theft and misuse of opioid medications, but you must have written policies that set out your pharmacies procedures and protocols as well.

3. Lack of Written Policies on Diversion Control

Similarly, the DEA’s Diversion Investigators will be looking to see that your pharmacy’s compliance program includes adequate provisions regarding diversion control. Under federal law, pharmacies are obligated to play an active role in preventing the diversion of opioids and other commonly-abused drugs. If your pharmacy simply fills prescriptions as they come in, this is not going to be looked upon favorably by the DEA.

4. Lack of Documentation Showing How the Pharmacy Validates Narcotics Prescriptions

In particular, pharmacies must have adequate measures in place to validate all narcotics prescriptions. When one of these prescriptions come in, the pharmacy must confirm that the prescription is medically necessary, and it must take certain other steps in order to mitigate the chances of the drug ending up in the hands of a dependent user. Once again, however, simply having a compliance protocol isn’t enough—the protocol needs to be clearly documented as well.

5. Lack of Regular, Ongoing Communication with Prescribing Physicians

Part of the pharmacy’s regular process for validating narcotics prescriptions should include maintaining regular, ongoing communication with prescribing physicians. Here, too, documentation is critical, as the DEA’s Diversion Investigators will be looking for proof that your pharmacists routinely call patients’ doctors to confirm that their prescriptions are valid.

6. Filling of Prescriptions for Patients Who Pay in Cash

Inherently, there is nothing wrong with a patient paying in cash. But, if too many patients pay in cash, then the DEA will view this as a red flag. How many is too many? There is not a specific number, and DEA investigators will generally conduct a “smell” test taking the volume of cash payments into account within the context of other relevant factors. Ultimately, all cash payments need to be fully documented, and the DEA will be looking to see that the pharmacy is not routinely accepting cash payments under suspicious circumstances or specifically catering to cash-paying clientele.

7. Providing Patients with Frequent Refills

Prior to providing refills, pharmacies are supposed to confirm that the refills are medically necessary. Pharmacies that indiscriminately provide refills, especially for repeat customers, are likely to face allegations that they are not doing enough to prevent prescription fraud and mitigate the risk of the drugs they dispense being diverted or abused.

8. Unorganized Record-Keeping

We have mentioned various record-keeping related issues already, and there is a reason why. When facing a DEA audit, being able to use records to demonstrate compliance is easily among the best ways to avoid losing your pharmacy’s DEA registration and facing other penalties. Importantly, it isn’t just what records you keep that matters, but also how you keep them. If you cannot quickly find your pharmacy’s registration documents, compliance documents, or inventory records, the DEA’s Diversion Investigators are going to view this as a sign that they might not be sufficient.

9. Inventory Error Rates Above What the DEA Considers Normal and Acceptable

Mistakes happen, and even the DEA gives pharmacies a certain amount of leeway. But, if you make too many mistakes (and, here, too, there is no set number), then the DEA is going to dig deeper in order to find out why your pharmacy has made so many mistakes and just how deep the rabbit hole goes.

This is particularly true with regard to inventory errors. As a general rule, the DEA expects pharmacies to keep track of the drugs they have on hand. If Diversion Investigators see a disproportionate number of errors, they are going to determine why so that the DEA can act accordingly.

10. Dispensing Certain High-Risk/High-Suspicion Drugs (e.g., Oxy 30mg)

Certain drugs are well-known as being particularly sought-after among drug abusers and dependent patients. Dispensing a high volume of these drugs (such as Oxy 30g) is going to raise questions during a DEA pharmacy audit. Of course, these drugs all have legitimate medical uses, and patients can have valid prescriptions. But, if a pharmacy’s overall dispensing volume is too high, or if the same patients are consistently coming in for (and receiving) refills, then the pharmacy could be at risk for allegations of criminal drug diversion.

11. Dispensing Known Dangerous Drug Combinations (e.g., the “Holy Trinity”)

Just as dispensing certain drugs can increase a pharmacy’s risks during a DEA audit, so can dispensing certain drug combinations. In particular, this includes the “Holy Trinity,” which, for those that don’t know, is a combination of a benzodiazepine, an opioid, and a muscle relaxant. These combinations are highly sought after, but they are also highly dangerous—and this puts them at the top of the DEA’s list of enforcement priorities.

12. A History of Admonishment or Failed Inspections

Once your pharmacy gets on the DEA’s bad side, it can be a long and arduous process to restore its reputation. If your pharmacy (or you personally) have a history of admonishment or failed inspections, this will follow you into subsequent DEA audits.

The good news is that anything that was addressed in the past should stay in the past. If your pharmacy is now fully compliant (and you have the documentation to prove it), you can use this to resolve the audit without monetary liability or other penalties.

13. Referring Physicians Incentivized by Ownership or Other Financial Interest

Financial relationships between healthcare providers are always a touchy subject, and relationships between pharmacies and referring physicians are no exception. Whether a referring physician has (or has been offered) an ownership interest in the pharmacy or has another financial interest in directing patients to the pharmacy under audit, the pharmacy’s owners will need to be prepared to demonstrate how and why the relationship is legally permissible.

14. Inadequate Staffing

In order to meet their statutory and regulatory compliance obligations, pharmacies need to be adequately staffed. If a pharmacy isn’t adequately staffed, the DEA’s Diversion Investigators are going to assume that this means the pharmacy isn’t capable of managing compliance. Of course, different pharmacies will have different staffing needs, and it could very well be the case that a pharmacy is capable of operating “leanly” with less personnel than a similarly-sized pharmacy that dispenses a similar number of prescriptions.

15. Inadequate Training of Staff by Supervising Pharmacist in Charge (PIC)

Finally, in order to put it all together, pharmacies need to provide adequate compliance training to their staff. Different personnel will need to be trained on different aspects of compliance, but all personnel should be appropriately trained and have ongoing access to training and compliance documentation. If a pharmacy does not have recent up-to-date training logs, this will be viewed as a possible indication that there are compliance deficiencies to be found.

This list is not exhaustive. While these are among the most-common issues that come up during DEA audits, there are many more potential issues of which pharmacy owners and PICs need to be aware as well. To learn more, we encourage you to read our 100 FAQs for DEA Opioid Investigations.

Contact the Pharmacy Compliance Consultants and Federal Defense Lawyers at Oberheiden P.C.

Are you facing a DEA audit? If so, our pharmacy compliance consultants and federal defense lawyers can help you avoid unnecessary consequences. To get started with a free and confidential case assessment, call 888-680-1745 or request an appointment online now.

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